Why Is IMM Investment So Focused on 'Cloud'?

From Orchestra to NHN Cloud, Betting Hundreds of Billions
Shifting from Traditional Infrastructure like Roads and Ports to 'Digital Infrastructure'
Pivoting in Step with Companies' Digital Transformation (DX)

[Asia Economy Reporter Kwangho Lee] IMM Investment is steadily strengthening its portfolio by investing in cloud companies. Analysts interpret this as an intention to preempt the cloud market, which has a bright industrial outlook and continues to grow rapidly.

According to the investment banking (IB) industry on the 27th, IMM Investment secured a 15% stake in NHN Cloud by investing 150 billion KRW through the special purpose company (SPC) ‘Karitesu Co., Ltd.’ As a result, NHN Cloud's valuation has grown to around 1 trillion KRW.

NHN Cloud, which became a ‘unicorn’ thanks to IMM Investment, plans to use this investment to boost growth by advancing business operations such as ▶strengthening technology research and development (R&D) in cloud, artificial intelligence (AI), and XaaS (all cloud-based services) ▶maintaining leadership in the public market ▶targeting the private market ▶expanding global business ▶and actively developing regional hub cloud data center projects.

This is not IMM Investment’s first cloud investment. Previously, in July last year, through Infrastructure No. 9 Private Equity Fund (PEF), it solely invested 20 billion KRW in Okestro, a domestic cloud software specialist company. Okestro is securing additional revenue sources amid the cloud transition trend of companies previously invested in by IMM Investment and is aiming for full-scale global expansion through IMM Investment’s global network.

DreamMarkOne, an internet data center (IDC) operator located in Guro, Seoul, is also a representative part of IMM Investment’s cloud investment portfolio. In October 2021, IMM Investment invested 24.5 billion KRW in DreamMarkOne through the ‘Infrastructure No. 8 Fund’ together with Dreamline, a telecommunications service specialist. Then, early last year, Korea Investment Private Equity (hereafter KPE) acquired the management rights of Dreamline, which it held. They expect synergy effects between Dreamline’s nationwide 5G optical cable network and the domestic IDC industry, completing the acquisition of the parent company Dreamline. IMM Investment expects the recently invested NHN Cloud to create synergy effects with its existing portfolio companies Dreamline and DreamMarkOne.

Its affiliate, IMM Private Equity (PE), is showing a similar trajectory. In September last year, IMM PE executed a 200 billion KRW investment in Megazone Cloud through the I-Blind fund ‘Rose Gold No. 4.’ Subsequently, it expanded its influence by purchasing some existing shares held by Now IB Capital.

IMM Investment’s cloud company investment headquarters is the Infrastructure Investment Division. Until now, IMM Investment’s Infrastructure Investment Division has invested in traditional infrastructure sectors such as roads, airports, and ports. But now it is different. It is focusing on digital infrastructure. This is because digital infrastructure innovation has become important as companies’ digital transformation (DX) has emerged as an industrial issue.

An IMM Investment official said, “We are paying close attention to new technologies, new industries, data, and the growth of the digital industry,” adding, “The Infrastructure Investment Division is focusing on investing in trendier assets rather than traditional infrastructure.” He continued, “We will continue related investments.”

Meanwhile, Korea IDC forecasted in its ‘Domestic Public Cloud Industry Market Outlook’ report that the domestic public cloud service market will grow at an average annual rate of 14.8%. Considering this growth rate, the domestic public cloud market is expected to reach about 4 trillion KRW in three years.